Following the discovery of a new series of anti-acetylcholinesterase (anti-AChE) inhibitors such as 1-benzyl-4-[2-(N-benzoylamino)ethyl]piperidine (1), we reported that its rigid analogue, 1-benzyl-4-(2-isoindolin-2-ylethyl)piperidine (5), had more potent activity. We have extended the structure-activity relationship (SAR) study for the rigid analogue and found that the 2-isoindoline moiety in compound 5 can be replaced with a indanone moiety (8) without a major loss in potency. Among the indanone derivatives, 1-benzyl-4-[(5,6-dimethoxy-1-oxoindan-2-yl)methyl]piperidine (13e) (E2020) (IC50 = 5.7 nM) was found to be one of the most potent anti-AChE inhibitors. Compound 13e showed a selective affinity 1250 times greater for AChE than for butyrylcholinesterase. In vivo studies demonstrated that 13e has a longer duration of action than physostigmine at a dose of 5 mg/kg (po) and produced a marked and significant increase in acetylcholine content in rat cerebral cortex. We report the synthesis, SAR, and a proposed hypothetical binding site of 13e (E2020).